Key points
- The purpose of the 3 Appropriation Bills is to release money from the Consolidated Revenue Fund for the annual services of the Government.
- Appropriation Bill (No. 3) 2023–2024 seeks to appropriate $8.7 billion for the ordinary services of Government for measures announced since the 2023–24 Budget that require funding in 2023–24.
- Appropriation Bill (No. 4) 2023–2024 seeks to appropriate $2.3 billion for other services of Government for measures announced since the 2023–24 Budget that require funding in 2023‑24.
- Appropriation (Parliamentary Departments) Bill (No. 2) 2023–2024 seeks to appropriate $10.3 million for the Department of the House of Representatives and the Department of Parliamentary Services.
- Separate Bills are required to fulfil Constitutional requirements.
Introductory Info
Date introduced: 7 February 2024
House: House of Representatives
Portfolio: Finance
Commencement: On Royal Assent
Purpose of
the Bills
The Appropriation
Bill (No. 3) 2023–2024 (No. 3 Bill), the Appropriation
Bill (No. 4) 2023–2024 (No. 4 Bill) and the Appropriation
(Parliamentary Departments) Bill (No. 2) 2023–2024 (Parliamentary
Departments Bill) underpin the Government’s Mid-Year Economic and Fiscal
Outlook (MYEFO). These three Bills are termed the Additional
Estimates Appropriation Bills.
The purpose of the No. 3 Bill is to seek an
appropriation from the Consolidated Revenue Fund (CRF) of $8,703,757,000 ($8.7 billion)
for the ordinary services of Government.[1]
Of this appropriation:
- $3,970,480,000
($4 billion) is for the departmental activities of government entities[2]
and
- $4,733,277,000
($4.7 billion) is for activities that government entities administer on behalf
of the Commonwealth Government.[3]
The purpose of the No. 4 Bill is to seek an
appropriation for the other services of Government. The No. 4 Bill seeks to
appropriate $2,265,360,000 ($2.3 billion) from the CRF.[4]
Of this appropriation:
- $5,736,000
($5.7 million) is for payments to states, the ACT and NT and local government
- $2,259,360,000
($2.3 billion) is for non-operating activities.[5]
The purpose of the Parliamentary Departments Bill
is to appropriate $10,273,000 ($10.3 million) for
the Parliamentary departments.[6]
Structure
of the Bill
Part 1 of each Bill deals with preliminary matters,
including when the Acts commence and how to interpret them.
Part 2 of each Bill outlines the quantum and types
of appropriation from the CRF.
Part 3 of each Bill replenishes the Finance
Minister’s Advances or the Advance to the Presiding Officers of the
Parliamentary departments, as appropriate.
Part 4 of each Bill deals with several technical
matters, including crediting amounts to special accounts and formally
appropriating the amounts required from the CRF.
Schedule 1 in each Bill provides summary
information about the proposed appropriations to be made to the departments and
other Commonwealth entities listed.
Background
Under section 14 of the Charter of
Budget Honesty Act 1998, the Government must release a MYEFO report ‘by
the end of January in each year, or within six months after the last budget, whichever is later’. The
Government released the 2023–24 MYEFO on 13 December 2023.[7]
The 2023–24 MYEFO updated revenue and expenditure forecasts; it also included
announcements of new policy measures.[8]
The Additional Estimates Appropriation Bills will add to
or alter the appropriations set out in the 2023–24 Budget Appropriation Acts[9] to reflect all
measures announced in the 2023–24 MYEFO or subsequently. Further details of
those measures are included in the 2023–24 MYEFO.
About
appropriations
An appropriation is the legal release of monies from the
CRF.[10]
Appropriation Acts, however, do not create a source of power for the
Commonwealth to spend money; they merely release that money from the CRF. The
Commonwealth’s power to spend money must be found in other parts of the Constitution.[11]
There are unique constitutional requirements that a Bill proposing
to appropriate money must satisfy. In addition, an appropriation Bill must also
comply with certain presentational requirements. The Additional Estimates Appropriation
Bills do not deal with standing appropriations.
Constitutional
requirements
Section 81 of the Constitution
provides:
All revenues or moneys raised or received by the Executive
Government of the Commonwealth shall form one Consolidated Revenue Fund [CRF],
to be appropriated for the purposes of the Commonwealth …
Section 83 of the Constitution provides that no
money may be withdrawn from the CRF ‘except under appropriation made by law’.
The effect of these two sections is that all money received by the Commonwealth
must be paid into the CRF and must not be spent before there is an
appropriation authorising specific expenditure.
Powers of
the House of Representative to appropriate
Section 53 of the Constitution provides that laws
appropriating money may not originate in the Senate. Further, under section 56
of the Constitution, all proposed laws for the appropriation of money
may only be introduced following a recommendation by the Governor-General.[12]
By convention the Governor-General acts only upon the advice of the Executive,
so section 56 prevents non-government members of the House of Representatives
introducing Bills that would propose to appropriate money from the CRF.[13]
Powers of
the Senate to amend
The Senate may not amend proposed laws appropriating money
for the ordinary annual services of the Government. The Senate may, however,
return to the House of Representatives any such proposed laws requesting, by
message, the omission or amendment of any items or provisions.[14]
The Senate may amend proposed laws appropriating money for
purposes other than for the ordinary annual services of the Government, but
only if it does not ‘increase any proposed charge or burden on the people’.[15]
Conceivably, the Senate could amend an appropriation Bill for the other
services of Government so as to, for example, redirect the proposed
appropriation to another purpose, or reduce the proposed appropriation to nil.
The Senate may also request that, if new measures are included in a Bill for
the ‘ordinary annual services of Government’, the Bill be returned to the House
with a message requesting those new measures be omitted from the Bill.
The
‘ordinary annual services of government’ versus the ‘other’ services of
government
Section 54 of the Constitution
requires that there be a separate law appropriating funds for the ‘ordinary
annual services of government’ and that other matters must not be dealt with in
the same Bill. However, what constitutes the ‘ordinary annual services of the
Government’ and ‘other’ services of the Government is not defined in the Constitution.
A working distinction between ordinary and other annual
services was agreed in a ‘Compact’ between the Senate and the Government in
1965.[16]
Several amendments have been made to the Compact since 1965 and in 2010 the
Senate Standing Committee on Appropriations and Staffing recommended the Senate
restate the Compact in a consolidated form.[17]
On 22 June 2010, the Senate resolved as follows:
(1) To
reaffirm its constitutional right to amend proposed laws appropriating revenue
or moneys for expenditure on all matters not involving the ordinary annual
services of the Government.
(2) That appropriations for expenditure on:
(a) the construction of
public works and buildings;
(b) the acquisition of
sites and buildings;
(c) items
of plant and equipment which are clearly definable as capital expenditure (but
not including the acquisition of computers or the fitting out of buildings);
(d) grants to the states
under section 96 of the Constitution;
(e) new policies not
previously authorised by special legislation;
(f) items regarded as
equity injections and loans; and
(g) existing asset
replacement (which is to be regarded as depreciation),
are not appropriations for the ordinary annual services of
the Government and that proposed laws for the appropriation of revenue or
moneys for expenditure on the said matters shall be presented to the Senate in
a separate appropriation bill subject to amendment by the Senate.
(3) That, in respect of payments to international
organisations:
(a) the
initial payment in effect represents a new policy decision and therefore should
be in Appropriation Bill (No. 2); and
(b) subsequent
payments represent a continuing government activity of supporting the
international organisation and therefore represent an ordinary annual service
and should be in Appropriation Bill (No. 1).
(4) That
all appropriation items for continuing activities for which appropriations have
been made in the past be regarded as part of ordinary annual services.[18]
Adherence to the Compact has not always been strict, and
the High Court has held that any disagreements between the Houses are not
justiciable.[19]
Any disputes are to be determined between the Houses themselves.
Presentational
requirements
Departmental
and administered expenses
Australian Accounting Standard 1050 Administered Items
requires that government agencies distinguish between revenues and expenses
that they administer for the Government, and those over which they have some
control.[20]
Generally, administered expenses are the costs of programs that agencies run
for the Government, while departmental expenses are the costs incurred in
running agencies.[21]
Appropriation Bills, therefore, distinguish between
‘administered’ expenses and ‘departmental’ expenses. An administered
appropriation may be used only for the program or outcome that it is
appropriated for, while a departmental appropriation may be moved between
different departmental activities.[22]
Outcomes
and programs
While the level of detail necessary for an appropriation
Act to be valid is generally low,[23]
in the Pharmaceutical Benefits case the High Court held:
… there cannot be appropriations in blank, appropriations for
no designated purpose, merely authorising expenditure with no reference to
purpose. An Act which merely provided that a minister or some other person
could spend a sum of money, no purpose of the expenditure being stated, would
not be a valid appropriation Act.[24]
The appropriation Bills must, therefore, also describe in
general terms what the money is to be utilised for. These Bills use four
methods for describing the purposes of the proposed appropriations.
Appropriations
for ‘outcomes’ of non-corporate Commonwealth entities
For non-corporate Commonwealth entities, the purposes of
operating appropriations (both departmental and administered) are specified
with reference to the ‘outcomes’ of those entities. The Department of Finance’s
Outcome Statements Policy and Approval Process explains that:
Outcome statements articulate the intended results,
activities and target group of an Australian Government entity.
Within the Budget process, outcome statements:
- provide the basis for the
appropriation of Commonwealth money to an entity
- articulate the intended results,
activities and target group of the entity
- provide the basis for assessing
and reporting on the performance of the entity and the programs it delivers.[25]
Appropriations
for corporate Commonwealth entities
As corporate Commonwealth entities are legally distinct
from the Commonwealth itself, money cannot be appropriated directly to those
entities.[26]
Instead, amounts are appropriated to relevant Departments for on-payment to
corporate Commonwealth entities within Departments’ portfolios.
Non-operating
appropriations
Non-operating appropriations are amounts designated for
the capital needs of entities. Typically, these amounts are equity injections
into entities or money for the purchase or development of the assets of
entities.[27]
Under the Compact, they can only ever be proposed in a bill dealing with the
‘other’ annual services of Government.
Appropriations
for payments to the states
Under section 96 of the Constitution,
the Commonwealth may make payments to the states with or without conditions,
and amounts intended for payments to the states are identified separately.
Again, because of the Compact, amounts to the states can only ever be proposed
in a bill dealing with the ‘other’ annual services of Government. Amounts to
the Australian Capital Territory and the Northern Territory are also included
with the amounts for the states.
Appropriations
for the Parliament and the Judiciary
In 1981, the Senate Select Committee on Parliament’s
Appropriations and Staffing considered the appropriations for the Parliament,
in view of the unique constitutional position of the Parliament vis-à-vis the
Executive. The Committee noted section 53 of the Constitution’s
reference to the ‘ordinary annual services of the Government’ before observing:
… the Parliament may be ordinary; it may be annual; it may
even be regarded as a service; but it is not a service of the Government. It is
therefore inconsistent with the concept of the separation of powers and the
supremacy of Parliament to treat the provisions made for the Parliament as
being an ordinary annual service of the Government.[28]
The Committee recommended:
… all items of expenditure administered by the Executive
departments on behalf of the Parliament be brought together in [a]
Parliamentary Appropriation Bill …[29]
Since 1982, the appropriations for the Parliamentary
departments have been provided for via a distinct appropriation Bill.
Quarantining appropriations in this way only applies to
the Parliamentary departments (of which there are currently four).[30]
It does not extend to other aspects of the finances of the Parliament, such as
providing for the remuneration and allowances of parliamentarians.
Despite the fact that under the Constitution the
Judiciary is also distinct from the Executive, there is no equivalent practice
whereby the Judiciary is provided for via a distinct Appropriation Bill.
Advances to
the Finance Minister and the Presiding Officers
The Additional Estimates Appropriation Bills all propose
to replenish any amounts drawn from the advance to the Finance Minister or the responsible
Presiding Officers of Parliamentary Departments. The advances, established in
the first appropriation Acts each year, are an appropriation of money without
any particular outcome or specified purpose.
The Finance Minister may use the amount appropriated as an
advance to modify the schedule to an appropriation Act, but only where:
… the Finance Minister is satisfied that there is an urgent
need for expenditure, in the current year, that is not provided for, or is
insufficiently provided for, […]:
(a) because of an erroneous omission or understatement; or
(b) because
the expenditure was unforeseen until after the last day on which it was
practicable to provide for it in the Bill for this Act before that Bill was
introduced into the House of Representatives.[31]
An equivalent legislative scheme exists for the Presiding
Officers.[32]
In order to access an advance, the Finance Minister or
Presiding Officers must issue a determination[33]
under the relevant appropriation Act.[34]
At the time of writing, no
determinations have been made against Appropriation Act (No. 1) 2023–24
or Appropriation Act (No. 2) 2023–24 or Appropriation (Parliamentary
Departments) Act (No. 1) 2023–24.
Committee
consideration
Senate
Standing Committee for the Scrutiny of Bills
At the time of writing, the Additional Estimates Appropriation
Bills had not been considered by the Senate Standing Committee for the Scrutiny
of Bills.
Financial
implications
The No. 3 Bill proposes to appropriate $8,703,757,000
($8,7 billion) from the CRF.
The No. 4 Bill proposes to appropriate $2,265,360,000 ($2.3
billion) from the CRF.
The Parliamentary Departments Bill proposes to appropriate
$10,273,000 ($10.3 million) from the CRF.
The total amount of money proposed to be appropriated by
the three Bills is $10,979,390,000 ($11 billion).
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Additional Estimates Appropriation Bills’ compatibility
with the human rights and freedoms recognised or declared in the international
instruments listed in section 3 of that Act.
The Government states each of the Additional Estimates Appropriation
Bills perform:
… an important constitutional function, by authorising the
withdrawal of money from the CRF for the broad purposes identified in the Bill.
However, as the High Court has emphasised, beyond this, the Appropriation
Acts do not create rights and nor do they, importantly, impose any duties.
Given that the legal effect of Appropriation Acts is limited
in this way, the Bill is not seen as engaging, or otherwise affecting, the
rights or freedoms relevant to the Human Rights (Parliamentary Scrutiny) Act
2011.[35]
Parliamentary
Joint Committee on Human Rights
At time of writing, the Additional Estimates Appropriation
Bills had not been considered by the Parliamentary Joint Committee on Human
Rights. However, the Committee stated in 2023:
… the allocation of funds via appropriations bills is
susceptible to a human rights assessment that is directed at broader questions
of compatibility. … The committee also considers that a statement of
compatibility with human rights should address the compatibility of measures
which directly impact human rights and which are not addressed elsewhere in
legislation, as the appropriation bills may be a key opportunity for the
Parliament to consider the compatibility of the measure with human rights. The
committee considers that further information is required to fully assess the
compatibility of the measure, and is seeking further information from the
minister.[36]
Key issues and provisions
No. 3 Bill
Clauses 6–9 of the No. 3 Bill outline the quantum
and types of appropriation from the CRF.
Clauses 10–12 of the No. 3 Bill provide for several
technical matters, including details relating to special accounts, formally
appropriating the amounts required from the CRF, and the future repeal of the
Act on 1 July 2026.
Schedule 1 of the No. 3 Bill provides details about
the appropriations to both non-corporate entities and to corporate entities as
defined by the PGPA Act.
Table 1 below sets out in summary form the amount of
appropriations in Schedule 1 of the No. 3 Bill.
Table 1 Appropriations in the No. 3 Bill
| Portfolio |
Total |
|
|
$’000 |
| Agriculture, Fisheries and Forestry |
90,820 |
| Attorney-General’s |
253,083 |
| Climate Change, Energy, the Environment and Water |
288,776 |
| Defence |
2,233,363 |
| Education |
130,052 |
| Employment and Workplace Relations |
833,623 |
| Finance |
56,612 |
| Foreign Affairs and Trade |
260,580 |
| Health and Aged Care |
1,145,678 |
| Home Affairs |
702,876 |
| Industry, Science and Resources |
341,516 |
| Infrastructure, Transport, Regional Development, Communications
and the Arts |
171,545 |
| Prime Minister and Cabinet |
43,844 |
| Social Services |
1,812,405 |
| Treasury |
338,984 |
| Total |
8,703,757 |
Source: Appropriation Bill (No. 3) 2023–2024, Schedule 1.
No. 4 Bill
Clauses 6–11 of the No. 4 Bill outline the quantum
and types of appropriation from the CRF.
Clauses 12–14 of the No. 4 Bill provide for several
technical matters, including details relating to special accounts, formally
appropriating the amounts required from the CRF, and the future repeal of the
Act on 1 July 2026.
The money in the No. 4 Bill is appropriated to
incorporated and non-incorporated Government entities according to Schedule
1 of that Bill as either:
- grants
to the states, territories and local governments
- non-operating
(or ‘capital’) appropriations.
These appropriations cannot be included in the No. 3 Bill
as they do not relate to the ‘ordinary annual services of Government’.
Table 2 below sets out in summary form the amount of
appropriations in Schedule 1 of the No. 4 Bill.
Table 2 Appropriations
in the No. 4 Bill
| Portfolio |
Total |
|
|
$’000 |
| Agriculture, Fisheries and Forestry |
1,050 |
| Attorney-General’s |
20,090 |
| Climate Change, Energy, the Environment and Water |
42,600 |
| Defence |
320,124 |
| Education |
— |
| Employment and Workplace Relations |
17,506 |
| Finance |
440,596 |
| Foreign Affairs and Trade |
7,500 |
| Health and Aged Care |
160,027 |
| Home Affairs |
110,631 |
| Industry, Science and Resources |
— |
| Infrastructure, Transport, Regional Development, Communications
and the Arts |
272,428 |
| Prime Minister and Cabinet |
— |
| Social Services |
45,625 |
| Treasury |
827,183 |
| Total |
2,265,360 |
— indicates nil
Source: Appropriation Bill (No. 4) 2023–2024, Schedule 1.
Parliamentary Departments No. 2 Bill
Clauses 6–10 of the Parliamentary Departments No. 2
Bill outline the quantum and types of appropriation from the consolidated
revenue fund.
Clauses 12–13 of the Parliamentary Departments No.
2 Bill provide for several technical matters, including details relating to
special accounts, formally appropriating the amounts required from the CRF, and
the future repeal of the Act on 1 July 2026.
Table 3 below sets out, in summary form, the amount of
appropriations in Schedule 1 to the Parliamentary Departments No. 2
Bill.
Table 3 Appropriation in the Parliamentary
Departments No. 2 Bill
| Department |
Total |
|
|
$’000 |
| Department of the Senate |
— |
| Department of the House of Representatives |
273 |
| Department of Parliamentary Services |
10,000 |
| Parliamentary Budget Office |
— |
| Total |
10,273 |
—
indicates nil
Source: Appropriation (Parliamentary
Departments) Bill (No. 2) 2023–2024, Schedule 1.